Financial Impact of First Apartment
“The greatest gifts you can give your children are the roots of responsibility and the wings of independence.” — Denis Waitley
Anybody remember their first apartment? I can still see the look on my father’s face as he drove the U-Haul up to the building. It was located on Des Plaines Avenue in Forest Park: the last stop heading west on Chicago’s ‘L’ and more precisely, the Blue Line.
When I paid my deposit a few weeks earlier, I naively considered this to be on the cusp of Oak Park, the site of Frank Lloyd Wright’s home and studio. As a devotee, I thought this would be a more meaningful place to live than an overpriced studio in Lakeview. The mistakes we make in our youth!
In response to my father’s expression, I explained that the neighborhood was being gentrified. I’m certain that I had just learned the meaning of this word and tossed it around proudly as my father checked the deadbolts. It was dusk and he would be returning that same day to our hometown in Ohio.
With that I waved goodbye and my adulthood “officially” began. I considered this moment to be my coming of age and this simple convention taught me independence and what it means to be self-sufficient. After this move, I never felt I should or could ask my parents for money.
A couple of weeks ago, the Los Angeles Times published an article by H. May Spitz in his Rental Savvy column. A reader wrote in about her college age child moving into his first apartment and she asked what could be done to ease the transition. He responds: “Leaving home to become a tenant in one’s own unit is a huge step toward adulthood. For many, it’s the first time their behavior permanently affects their future — if they trip up, they could hurt their credit and personal reference history.”
“It’s a good idea for parents who are planning to co-sign on a rental lease to set ground rules for personal and financial responsibility. Will your son be working and contributing to the rent or going to school or both? Based on that, decide who pays for what percentage of the rent, making clear that being a responsible tenant is 100% his responsibility.”
“Going over the language and terms of the lease is a good way to launch kids’ education on the subject of landlord expectations and obligations. Some rental agreements include rules about loud noise after a certain hour, parties, how balconies can be used and where bicycles can be stored. Remind your new renter that the adage ‘rules were meant to be broken’ won’t wash anymore, and ignoring them could get him soaked both financially and legally.”
Most people have been a first-time renter once… if you haven’t then you should write the book on wealth and the secret to owning a home in your early twenties. But almost everyone rents at first and aside from managing the use of a credit card or making a car payment; this typically is the first significant financial responsibility for most kids.
If you or your child are leaving the nest soon, then here are a few tips to become equip for the lessons ahead. MyFirstApartment.com is a great resource. Their blog posts are helpful and full of real life and recent experiences since they are written by and for first time renters. Here is a list of their Top Five First Apartment Mistakes. Click on the link to read the expanded tips:
Mistake #1. Paying Too Much.
Mistake #2. Bad Location, Bad Location, Bad Location.
Mistake #3. Picking the Wrong Roommates.
Mistake #4. Not Reading the Lease.
Mistake #5. Spending Too Much on Furnishings.
Erin Burt at Kiplinger’s wrote an article called 7 Sins of First-Time Renters. Her version is a bit more robust and covers topics such as failing to read the lease, not seeing the apartment before moving in, not asking about utilities — or forgetting to turn them on, and underestimating the cost. For example, she writes: “The first item of business when looking for a place to live: How much you can afford to spend on housing? Use this handy calculator to help you tally your monthly expenses and see how much money you’ll have left to spend on rent. Then, find out how much apartments cost in your desired neighborhood by browsing newspaper classified ads or online rental sites such as Move.com or Craigslist.org. This will help you determine if you can even afford to make the move, and whether you’ll need a roommate (or two) to split the costs. (Find out where you can get a good roommate.)”
“But rent isn’t the only cost for which you have to budget. Don’t forget to anticipate your ‘start-up’ expenses when you first move in… One note of caution: Don’t rely on your credit cards to fund your move-in expenses. You don’t want to start out your new life of independence by being chained to ruthless interest payments. Once you get into debt, it’s hard to break away.”
Burt also talks about the value of renter’s insurance, a topic that John, aptly covered in his post yesterday, entitled Peace of Mind with Renters Insurance.
Does anybody have stories to share about their experience? It’s a huge step in becoming independent and responsible adults. I would love to hear your thoughts on the topic!
I moved away from home into a dorm. For my first move to an apartment, I called an old dorm roommate and asked if she needed a roommate and, if so, would she like me for a roommate. She said yes, and I said great. She asked if I wanted to see the place or anything. I figured that if she could afford it and if it was safe enough for her and close enough to campus for her, etc., it would be fine for me too. I was right about those things.
But then I remembered to ask her the one thing I cared about–does she have any cats? No. Good, because my boyfriend was allergic to cats.
Oh, well, too bad, because by the time I moved in, she had a cat! So he didn’t come over too much. It was otherwise a great place.
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My first apartment by myself required me to get more furniture. In the past, my roommates had always had their own living room furniture, TV, etc. I did have my own bed and dresser by then.
I remember when I got my TV and VCR, I called a taxi to pick me up at the store. I could get there on a bus, but couldn’t carry the stuff back on the bus and I didn’t have a car. Expensive!
I also remember doing research on couches. I thought all couches were ugly, so I started paying attention to which pieces of furniture people chose to sit on at other people’s houses. The answers surprised me.
Most often they sat on the floor, on the floor leaning back against the couch or comfy chair, or, if the couch was in the middle of the room rather than against the wall, on the back of the couch. This made me feel much less stressed about getting a couch! I ended up just using a storage bench my mom and uncle had made me plus a comfortable sling chair that could later be moved to a patio.
In this week’s Carnival of Personal Finance:
http://wereindebt.com/carnival-of-personal-finance-98/